Short Term Rental, Long Term Rental, or sell?
Hey all, its been a while but I have been diving deep into the BiggerPockets podcast again and re-reading the REI books I've bought now that my wife and I are in a better position to begin planning out our investment roadmap! A bit of background before the questions. My wife and I bought a house in Mauldin in Feb in what I'd say is a C, maybe C+ area (still having a hard time rating areas). It needed a little bit of work but was in great shape for a house built in 1965. I will say, it seems like a very popular area as our Agent told us at closing that he heard there were some 4 cash offers on our house that came in just after we got the house under contract. We've put quite a bit of money and sweat equity into the house: new water supply lines from water meter on, blown in additional insulation, new water heater, installed a dishwasher and garbage disposal (neither existed previously), converted the den into an additional bedroom, and done some various things to bring the house up to modern times and add additional value. We plan on having a patio poured and doing a slight remodel to bathroom as well. It's a 3BR 1BA. We just learned that we will be welcoming our 2nd child next year, and I'd like to get something bigger while keeping the house as a rental property. Considering doing either a cash-out refi or a HELOC (if anyone has an opinion on which way to go suggestions are more than welcome!), renting out our current property, and buying a larger home (that will, ideally, need work so we can value add and pull the money out when we are ready to get a 3rd property).
There are quite a few rental properties both on our street and the 2 streets surrounding ours and I am thinking about going down the rental path so we can get started. I ran the cash flow numbers based off other similar rentals in the area and I'm coming up with 100-150/month. Mauldin has announced a city center within walking distance of the house, so if that goes through I'd hope our property value increases and hopefully with that rental rates. I'm looking at the possibility of doing AirBNB instead with the hope of increasing the cash flow at least at the start to help cover any surprise expenses that come up (and not have to dip into our savings), but not sure how well it would perform being in Mauldin? The house itself is in a great location, with easy access to Woodruff road, Laurens road, and 385.
Questions: Does anyone have AirBNB (and homeaway, etc) properties in class C areas and how well do they perform? To piggyback on that, how well do AirBNB properties do in areas that are close to a city that isn't necessarily a tourist attraction area and not close to big employers in the area? If AirBNB does not work out and being in a very competitive market like Greenville where it seems the 1% rule does not exist, is it worth keeping a property that cash flows 100-150 a month? My worry is we get 1 years worth of rent and then have to deal with turnover or eviction and end up losing money. We are in this for the long haul and would love to hear your experiences and suggestions here!